When borrowing for an investment property, it’s important to consider your budget and
cashflow, including some margin for any unexpected expenses or interest rate rises. Once
you’ve covered all the bases, it’s relatively straightforward. Your property’s value should
gradually increase and generate equity in the coming years.

Using equity to buy your investment property
Equity is the difference between what you owe on a property and its market value if you were to sell it.
For example: if your home is worth $400,000 on the market, but you only owe $150,000, then you have
equity of $250,000.
This means that you potentially have access to $250,000 in equity if you refinance your loan. Utilising
the equity in your home as a deposit is a great way of securing finance for an investment property.

Buying an investment property through a superannuation fund
Did you know you can now use your self-managed superannuation fund (SMSF) to buy an investment
property? This is another investment option and we can refer you to an accountant to find out:
• What you can and cannot do with your SMSF
• The benefits of using a SMSF to buy a property
• The challenges and pitfalls of taking on such an investment
• Using the correct trust structures
• Tax strategies and deductions.
Buy, renovate and sell (also known as "flipping")
Purchasing a run-down property and then flipping it by renovating it and selling it on is a strategy
some investors use to build equity and make profit quickly. However, to make a profit, you need to
consider factors such as agent fees, stamp duty and home value price trends. With this strategy, you
will have to considerably increase the value of the property to make a profit as you will be required to
pay tax on any capital gain.

Finance brokers can compare lots of different lenders and, if there is a better opportunity, they’re able to access it. Finance brokers are always working to give you great advice that’s in your best interests.